No Service Tax on Construction of Complex Services provided by cooperative housing society to its members: CESTAT [Read Order]

Service - Tax - Construction - Services - cooperative - society - CESTAT - TAXSCAN

In a recent ruling,the Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)has held that Service Taxis not leviable on the construction of complex services provided by cooperative housing society to its members.

Shrinandnagar V Co-Operative Housing Society Limited, the appellant filed the appeal against Order-in-Original whereby, the adjudicating authority namely Commissioner, Service Tax, Ahmedabad confirmed the demand of service tax along with interest and penalties under the category of ‘Construction of Complex Service’. The adjudicating authority precisely held that the cooperative societies of the members have provided construction of complex service to its members and the same is liable for service tax.

The appellant contended that the service provided by the cooperative societies to its members involved mutuality of interest, there is no relationship betweenthe service provider and service recipient between cooperative societies and its members therefore, the same is not liable to service tax.

It was evident that the appellant had deposited some amount of service tax for which they had claimed the refund. The said refund was rejected on merit however, this tribunal allowed the refund after considering the merit in detail. It was argued that the service between the present cooperative housing society to its members is not liable for service tax.

The appellant during the investigation had deposited some amount of service tax for which they claimed a refund. The lower authorities had rejected the claim on merit that the activity of the appellant is liable to service tax.

It was viewed that the housing society is putting forth a claim on the premise that the contractor who undertakes the construction work, would be liable to pay service tax but the society in turn, cannot be said to have supplied any services to its members.

A two-member bench comprising Mr Ramesh Nair and Mr C L Mahar observed that in absence of any indication in the amendment to make it either retrospective or explanation being merely declaratory or clarificatory in nature, such statutory change cannot be made applicable to the long past events.

The CESTAT set aside the impugned order and allowed the appeal of the assessee.

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